Icahn Enterprises LP (NYSE:IEP) shares slid more than 17% to $41.72 on Tuesday after infamous short seller Hindenburg Research revealed that it has taken a short position against activist investor Carl Icahn’s publicly-traded holding company, alleging “inflated” asset valuations, among other reasons.
“Overall, we think Icahn, a legend of Wall Street, has made a classic mistake of taking on too much leverage in the face of sustained losses: a combination that rarely ends well,” Hindenburg Research wrote in a note published on Tuesday.
Hindenburg also alleges Icahn was operating a “ponzi-like economic structure,” selling its units to new investors to support its dividend payouts.
Florida-based Icahn Enterprises is a holding company that involves in a myriad of businesses including energy, automotive, food packaging, metals and real estate, CNBC reported.
The conglomerate is currently yielding 15.9%, which Hindenburg said it believes is “unsupported” by the company’s cash flow and investment performance.
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